⚠ The Legacy Base May Matter LessModerate threat

An installed base is a source of annuity revenue, but it is also a snapshot of the past, and the ground under Vertiv is shifting fast. Much of the existing base is older, traditional, air-cooled power and cooling equipment installed in a pre-AI world. As the industry pivots to dense, liquid-cooled, AI-era architectures, some of that legacy base becomes less strategically central: new construction is designed around new approaches, and the service revenue from aging traditional equipment, while real, is not where the growth or the future lies. An installed base can quietly depreciate in relevance even as it generates cash.

The risk is twofold. First, the transition to new architectures reopens the competitive contest at exactly the greenfield moments where incumbency matters least, so Vertiv cannot simply ride its legacy base into the AI era — it must win the new designs afresh. Second, if the technology shift is sharp enough, portions of the older base could be retired or replaced faster than expected, shortening the annuity on that equipment. Vertiv's answer is that it is winning the new liquid-cooled architectures and thereby seeding a new, larger, higher-value installed base for the AI era — which is precisely the bull case. But it is a reminder that an installed base is a wasting asset that must be continuously renewed by winning the next generation, not a permanent endowment — and that the annuity's durability depends on staying on the right side of the technology transition — the same transition driving liquid cooling and the AI backlog¹.